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Louisiana Federal Judge Blocks Drilling Moratorium 691

Posted by kdawson
from the spill-baby-spill dept.
eldavojohn writes "In the ongoing BP debacle, the Obama administration imposed a six-month moratorium on offshore drilling and a halt to 33 exploratory wells going into the Gulf of Mexico. Now a federal judge (in New Orleans, no less) is unsatisfied with the reasons for this and stated, 'An invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country.' The state's governor agrees on the grounds that blocking drilling will cost the state thousands of lucrative jobs." The government quickly vowed to appeal, pointing out that a moratorium on 33 wells is unlikely to have a devastating impact in a region hosting 3,600 active wells. And reader thomst adds this insight on the judge involved in the case: "Yahoo's Newsroom is reporting that the judge who overturned the drilling moratorium holds stock in drilling companies. You can view his financial disclosure forms listing his stock holdings online at Judicial Watch (PDF)."
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Louisiana Federal Judge Blocks Drilling Moratorium

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  • by Rude Turnip (49495) <valuation@gma[ ]com ['il.' in gap]> on Tuesday June 22, 2010 @03:52PM (#32658120)

    That's how it works. A portion of your pay in some firms is indirectly slotted toward campaign contributions for certain candidates. That way, the company isn't making one, big, glaring contribution.

  • by PCM2 (4486) on Tuesday June 22, 2010 @04:02PM (#32658242) Homepage
    Interestingly enough, I just read an editorial about Obama v. BP [economist.com] in this week's issue of The Economist. The subheading: "America's justifiable fury with BP is degenerating into a broader attack on business." Some choice quotes:

    Mr Obama decided to "inform" BP that it must put adequate funds to meet all compensation claims into an escrow account beyond its control, although he has no authority to do so. Nancy Pelosi, the speaker of the House of Representatives, instructed it not to pay a dividend until all claims tied to the spill are settled. Her fellow Democrats in Congress are trying to raise BP's liability retroactively--the sort of move America's courts rightly frown on. Mr Salazar, on even thinner legal ice, suggested that the government would hold BP accountable not just for the harm directly done by the spill, but also for the jobs lost in the oil business thanks to the freeze on oil drilling in deep water that he himself has imposed.

    The magazine frowns upon all these things and it makes some sense. If, as The Economist suggests, BP's value has already dropped by $89 billion and that's "far in excess of all but the most dire forecasts of the ultimate costs of the spill," what is to be gained by all this backlash against the oil industry but a bunch of political posturing?

    News flash: The United States is still inexorably reliant on its oil industry. If the Obama administration wants to do something about future oil disasters, maybe it should think more seriously about that and what can be done about it. Also, had government done a better job of regulating the oil industry in the first place, BP's shoddy practices might not have gone unchecked and this disaster might never have happened.

  • by RingDev (879105) on Tuesday June 22, 2010 @04:04PM (#32658268) Homepage Journal

    Uh, no. That would be illegal. Unless they are offering an accounting service opt in where by employees could choose to donate some portion of their pay.

    In any case, we're not talking about "millions" here. We're talking about less than $80,000. None of which came from PACs. $80k out of the $800,000,000 that Obama raised for his election campaign. From BP alone, the amount it's employees donated to Obama was more than the amount that it's employees and PAC donated to McCain, but for the oil industry as a whole, McCain pulled in over 3 times as much as Obama.

    If it had been an Exxon or Trans-Ocean rig that had blown out, the numbers would have strongly favored McCain.

    -Rick

  • by Alaska Jack (679307) on Tuesday June 22, 2010 @04:07PM (#32658310) Journal

    From page 20:

    The Court cannot substitute its judgment for that of the agency, but the agency must "cogently explain why it has exercised its discretion in a given manner" (State Farm, 463 U.S. at 48). It has not done so.

        - AJ

  • Re:So? (Score:4, Interesting)

    by twoallbeefpatties (615632) on Tuesday June 22, 2010 @04:09PM (#32658342)
    They also said regulators failed to tell Obama that all active deepwater rigs passed an immediate re-inspection after the Deepwater Horizon exploded and sank, with only two rigs reporting minor violations and the rest getting approval to continue operations.

    Would those inspections be conducted by the MMS whose head was recently kicked out when it was discovered just how much they were in bed with the industry?
  • My answer - nuke em (Score:5, Interesting)

    by Anonymous Coward on Tuesday June 22, 2010 @04:21PM (#32658498)

    Having worked in nuclear power for 25+ years I know something about how accidents happen and how to prevent them. This event was a total institutional failure. BP failed, the MMS failed, the other oil companies and supporting companies failed. This is epic failure like we haven't seen since Chernobyl, worse in my view because the reactor (in this case, the well) is still critical, still on fire, and a mile under water. The blow out preventers have been shown to not work, the emergency plan has been shown to be a fraud (walruses anyone - dead people phone numbers anyone, buhler?) the technology to respond to blowouts and 10-100,000 barrel a day leaks simply does not exist, and the regulator might have well been saboteurs for all the good they did. A 6 month moratorium is not even close to enough time to fix these problems. But I would put the ball back in the industry's court, my solution would be to make 10CFR50 App B (nuclear power regulation for quality) apply to deep well drilling and tell the industry they can start drilling as soon as their CEO states under oath or affirmation (i.e. lie and its a crime) that their rigs comply. Safely handling high hazards ain't new, many industries do a fine job - BP has proven it can't and by the above revelations we have no assurance that Exxon, Shell, Halliburton or anyone else can either. Shutting down a few wells will hurt the economy of Louisiana and I say tough shit until you fix your problem. But on the other hand I never saw so many people working at a nuke like the ones that have been shut down for safety problems. Once the oil companies see what they have to do to get their practices fixed there will be many many many jobs for the people that will be doing the fixing.

  • by gearloos (816828) on Tuesday June 22, 2010 @04:21PM (#32658504)
    The oil companies have rigs THEY bought. That money is sitting out there doing absolutely nothing. Say...Brazil has an oil field. Well, guess what, the rigs getting moved to a place where they are actually wanted, and a place where money will start coming in. As for the gulf well, just imagine you spent 15 million dollars to move your rig and now HObama says its ok to start drilling again. You think they are going to move those oil rigs back? Fat chance. Once they are gone, it might be 20 years before anyone even thinks about drilling in the gulf again and as for the jobs in that area, better learn Spanish and head to Brazil or Venezuela because those jobs are going to be gone...for good...yeah I think that about sums it up as to why its so important to get drilling started again(and yes I am all for tightening the crap out of safety regulations)
  • by cfulmer (3166) on Tuesday June 22, 2010 @04:34PM (#32658668) Homepage Journal

    We can argue day and night about whether more drilling is a good idea. But that's not the question -- the real question is:

    Does the law give the President the power to impose a moratorium in this situation?

    If not, then it doesn't matter whether it was a good idea or not. The President is not a King or an Emperor. He does not have the authority to decree how things should be, no matter how mad he is or how great of an idea his decree is.

  • by mmalove (919245) on Tuesday June 22, 2010 @04:49PM (#32658878)

    First, a disclaimer.

    I happen to live on planet Earth. I am, therefore, somewhat biased to protect it. This bias may affect my perception of decisions, such as drilling oil wells that could have "immeasurable effects" on the ecology of the drilling site if done wrong.

    Now, this article summary, and the statement from the judge, shows clearly in my opinion why we should never use the word immeasurable as a way to justify one action or another. It seems the opposition quite quickly was able to measure the impact, and the impact is about 1%. The first oil company willing to pledge enough cash to completely recover from a second disaster like the BP one, I'd say happy drilling. Until then, we need to suspend drilling holes at depths where we aren't technologically far enough along to fix things if they go wrong.

    It does surprise me, that we've found the technology to destroy this planet hundreds of times over with nuclear energy, but we can't plug a hole a mile underwater. Kinda leads you to which way this planet's headed.

  • by michael_cain (66650) on Tuesday June 22, 2010 @04:50PM (#32658888) Journal

    They are only asking for 6 months, not a permanent ban.

    Six months is a very long time if you are the owner of one of the drilling rigs. Especially since there are no guarantees about how soon drilling might reasonably resume, or the pace of drilling when it does. Globally, there are other opportunities to rent out the rig. Once activities in the Gulf are shut down, it may take a few years to recover to the current level.

  • by kingramon0 (411815) on Tuesday June 22, 2010 @05:09PM (#32659094) Homepage

    ... We know that we must run deficits, large ones, in order to create a demand stimulus large enough to moderate this trough of the economic cycle. Nonetheless, we have politicians trying to score political points by railing against deficit spending -- which didn't bother them for the past 8 years when they were in charge. ...

    While I won't argue with the fact that establishment Republicans are hypocrites, I believe your economic assertions are in error. Keynesian economics have been fully discredited, in my view. I subscribe to the Austrian School of economics, which states that reducing government spending and allowing bad debt to be liquidated is the only way to ensure the long-term stability of the economy.

    What you essentially said is that my view is ignorant, but perhaps you should investigate your own claims, and explain why Keynesian economic policies of running large deficits allowed the Great Depression to persist for 15 years, if it is so obviously the solution to a troubled economy.

    But my point is that there are ideas out there other than the one you believe to be true; it does not mean that people that disagree with you are ignorant.

  • Re:So? (Score:5, Interesting)

    by BlueStrat (756137) on Tuesday June 22, 2010 @05:21PM (#32659204)

    Yahoo's Newsroom is reporting that the judge who overturned the drilling moratorium holds stock in drilling companies.

    No conflict of interest here, no sir...

    Just like there's no conflict of interest in the fact that the US government just loaned the Brazilian state-run oil company Petrobras 2 billion dollars for offshore drilling in depths far exceeding the moratorium.

    Funny coincidence also that George Soros, (who, through the Center For American Progress & John Podesta, who also headed Obama's transition team and chose who filled most of the top positions in the administration) invested a huge amount in Petrobras only days before the government's decision to invest. George Soros stands to make a killing from the drilling moratorium.

    Why is the administration crippling US oil companies while investing heavily in a foreign oil company?

    Strat

  • by Anonymous Coward on Tuesday June 22, 2010 @05:23PM (#32659224)

    pointing out that a moratorium on 33 wells is unlikely to have a devastating impact in a region hosting 3,600 active wells.

    Those 33 wells are the focus of most of the high value work taking place. Finished, productive wells require very little labor or material relative to those 33 deep water wells. One of those deep water rigs is worth a hundred finished wells in terms of economic activity.

    The experts cited by the government as recommending a moratorium unanimously deny making any such recommendation. The Judge voided this moratorium in part because the government just made up that part. We we're repeatedly promised fact based, expert and scientific governance by Obama.

    I'm not happy with this Judge. This is just more judicial activism at work and I'm no more in favor of this instance than any other, even if the governments claims are bogus. The Interior Department has jurisdiction over the minerals of this nation and judges shouldn't be second guessing it any more than they should be imposing gay marriage on voters that reject it. Besides, I'd rather Obama and crew go into November with the moratorium in place, months after the huge layoffs in LA and the evacuation of all of the deep water rigs to South America and the African coast.

  • by TopSpin (753) on Tuesday June 22, 2010 @06:05PM (#32659622) Journal

    Does the law give the President the power to impose a moratorium in this situation?

    The president is the head of the Interior Department, the institution responsible for the leases that permit drilling, and the Interior Department is a creation of Congress, which has the power to establish the cabinet. Those leases come with strings attached; the Interior Department reserves the right to suspend the leases for various reasons. Seems pretty clear to me that Obama does have the authority.

    Judicial activism is judicial activism whether it's pro- or anti- oil, gays, guns or whatever. We have a president for a reason and he is supposed to have power for a reason.

    Let him ban deep water rigs. Let him destroy 30% of LA's economy[1] five months before the midterms in the middle of the Great Recession. Lets watch what happens when Chevron, Shell, etc. individually announce that their rigs are moving out of US waters. See the result when Haliburton et al. start laying off thousands. I say go for it Mr. President. Wreck the US oil industry; see how that plays out when we get to vote 22 weeks from now.

    [1] the big drilling rigs, as opposed to finished production rigs, are where all the $$ is; finished wells don't employ many people. Some folks, like /. editors, either don't understand that or at least hope you don't.

  • by Anonymous Coward on Tuesday June 22, 2010 @07:03PM (#32660122)

    ">News flash: The United States is still inexorably reliant on its oil industry. If the Obama
    >administration wants to do something about future oil disasters, maybe it should think more
    >seriously about that and what can be done about it.

    Like developing alternative energy sources from solar to nuclear, and encouraging the development and adoption of fuel efficient and preferably electric vehicles? Yeah, that's being done. I'm sure more can be done. I'm all for it. I hope you are too."

    "Being done?" I'm sorry, but what's being done, and the history of what's been done, is a fricking joke! John Stewart had a great presentation on the Daily Show on June 16th. Go look it up if you want a laugh. It was a nice montage of 8 previous presidents pointing out the "oil problem" and their solutions and deadlines, all which amounted to no real progress on the problem (see below). It was a bunch of empty political promises and a drop in the bucket, which anybody in the energy business already knows to be the case. You could add up the sum total of all the new renewable energy projects and even new nuclear projects in the last 10 years and it wouldn't be 5% of the energy supplied by oil.

    Meanwhile the domestic oil production in the USA keeps on declining inexorably as it has since the 1970s, the demand for oil keeps going up, more gets imported, and everyone acts as if what's being done with alternative energy is enough and constitutes "progress" towards a solution. IT ISN'T. The US uses ~20 million barrels/day, produces about 7 million, and it imports the rest. That ratio has gotten worse *every*year* for more than 30 years. You're heading in the wrong direction. You're supposed to be decrease reliance on imported oil, not increase it. And putting the deepwater Gulf Coast in moratorium will only make things worse.

    All the "hope" and wishing in the world about alternatives isn't going to make any headway against that. Heck, the USA can't meet the modest goal of stabilizing its ever-increasing demand and ever-increasing imports of oil. If it can't even do that (short of causing a banking disaster that stifles the economy), then how on Earth could the USA ever make a significant dent in the problem and actually start decreasing total oil consumption and imports?

    The US needs to finally get serious about this issue and stop fooling around with mere enthusiasm for token amounts of alternatives, or setting useless political deadlines 20 or 30 years in the future instead of doing something bold in 10 years. It's time for a JFK-style "before this decade is out" effort, or the USA is never going to make real progress. And heaven help the USA when (not if) global oil production starts to go into decline too. Then you'll face the challenge of decreasing oil consumption by a percent or two a year the HARD way.

    I'm sorry to be so harsh, but I'm really sick of hearing the enthusiastic claim that progress is being made. I'm enthusiastic too, but I'm also realistic: no, it's not enough. Not even close. If it's not even enough to offset the increase in oil demand, then it's like bailing out the Titanic with a bucket and saying "Well, at least it's progress." It may be progress in theory but it is not in quantity.

  • by Kohath (38547) on Tuesday June 22, 2010 @10:34PM (#32661336)

    All that $89 billion means for BP is that they're a somewhat easier target for a stock buyout.

    Tell that to the shareholders who lost $89 Billion. Just because you don't understand this loss doesn't make it any less real to the people who used to own something valuable and now they no longer do.

    Like developing alternative energy sources from solar to nuclear, and encouraging the development and adoption of fuel efficient and preferably electric vehicles?

    The President develops energy sources now? How does he find time to do all that scientific work and still fit in so many parties and rounds of golf?

    Also, alternative energy sources are still so economically inferior to petroleum that we could have a spill like this every summer, make oil companies pay double for each cleanup, and the alternative sources still couldn't compete. Alternative energy is just another way of saying "please let me pay 5-10 times as much for energy". Electric cars are similarly limited in comparison to real cars. As a real product, they don't make sense. They're more understandable as an environmental religious sacrifice or some kind of green asceticism.

    Who would have thought that doing everything possible to deregulate, and the underlying philosophy that regulation is unnecessary, would result in insufficient regulatory action?

    Where has it been shown that regulations would have made any difference? Eleven guys were killed in the explosion. You think they care more about what some bureaucrat says than whether they live or die?

  • by bm_luethke (253362) <luethkeb@comca s t .net> on Tuesday June 22, 2010 @10:45PM (#32661390)

    That will be tough to happen.

    For the most part the left sees this as a great reason to pretend to go after "big oil" and the right sees this as a great reason to attack the current administration and the regulatory boards that failed to apply regulations. Further each side thinks it is gaining political capitol all while the oil companies are bribing their way to what they want. So they have both the political gains *and* monetary gains. Lastly the regs were ignored so what good will passing more do?

    Now, if that state of affairs will continue to occur after the next few months - lets say it takes two months to finally cap (a realistic time period). That means it not only hits landfall but spreads significantly (we will ignore the worst case of it making it around the top of Florida). We have a semi-major hurricane go through that and instead of dumping crude onto Cuba (which nobody here cares about) we have several states worth of coastline plus several miles in with a nice coating of crude oil all over then I think some hard questions are going to be asked. Remember this stuff isn't like the oil you get in a plastic jug at Wal-Mart - it is full of some VERY nasty chemicals.

    The different parties are mostly maneuvering to make the other side look bad and the more partisan have already taken up the mantra. No one is looking to fix it, they are both waiting for it to be a real disaster and plan to get the most political capitol out of it they can. I do not think that Obama is going to escape the storm (and I think it is too far gone for blaming Bush to stick outside of the True Believers), I do not know how individual congressmen are going to fare. Further it is hitting at just the right time to be a real election time issue too.

    I'll tell you how to make the industry self regulating too - make the company totally financially liable for any damages from an accident and hold the executives and board of directors criminally liable (and force them into a rough federal prison - none of those nicer ones) for the actions. That's not going to happen either, though it should. You can regulate all you want but if they are not enforced (for whatever reason) then they will do no good. Make it cheaper to be responsible and companies will, make it cheaper to bribe and ignore safety and most will. No one in power will do that because there is both too much money involved and most are so intertwined with those companies that they would find themselves in prison too.

  • Re:So? (Score:3, Interesting)

    by Chowderbags (847952) on Wednesday June 23, 2010 @09:16AM (#32664642)
    Money. It costs lots of money to have safety. The Navy doesn't need to make money, so it does things right. The oil companies want to make money, so they cut corners and play with the actuarial tables until the occasional spill just becomes the cost of doing business. Of course, since they've lobbied to have damages from oil spills capped to a pittance and they've controlled the people in charge of inspecting what safety they had, there was very little reason to be extra safe. That seems like the kind of thing worth changing.

The most exciting phrase to hear in science, the one that heralds new discoveries, is not "Eureka!" (I found it!) but "That's funny ..." -- Isaac Asimov

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